Daniel Generation Matters

A blog dedicated to raising up young adults of the caliber of Daniel, Paul, Moses, and Esther.

Thursday, January 19, 2017

Personal Integrity vs the Safety of the Herd

Consider these Biblical questions.Did the astrologers who could not describe or
interpret King Nebuchadnezzar’s dream not only keep their heads – did they also
keep their jobs? (Daniel 2)How about
the magicians in Pharaoh’s court, who could duplicate some, but not most, of
the plagues inflicted on Egypt before the Exodus? Did they keep their
jobs?(Exodus 7ff) Or the Pharisees of
Paul’s time, who opposed a nascent movement called The Way in Acts 5?Did they keep their situation?

Nate Silver, in his book, The Signal and Noise, has a
fascinating explanation for the many financial traders who continued to follow
the herd’s bad financial practices in the run-up to the 2008 great
recession.He points out four basic
possibilities:

(1) The trader buys
and the market rises.In this case,
it’s business as usual.Everyone is
happy when the stock market makes money.The trader gets a six-figure bonus and uses it to buy a new Lexus.

(2) The trader sells
and the market crashes.If the
trader anticipates a crash and a crash occurs, who will look like a genius for
betting on it when few others did.There’s
a chance that he’ll get a significantly better job – as a partner of a hedge
fund, for instance.Still, even geniuses
aren’t always in demand after the market crashes, and capital is tight.More likely, this will translate into
something along the lines of increased media exposure:a favorable write-up in the Wall Street
Journal, a book deal, a couple of invitations to cool conferences, and so forth.

Silver then cites a fascinating, hilarious, and sobering
description of (2):Michael Lewis’s The
Big Short, which was also made into a funny movie. Here’s Silver’s
description of the other two possibilities:

(3) The trader buys
but the market crashes.This is no
fun:he’s lost his firm a lot of money
and there will be no big bonus and no new Lexus.But since he’s stayed with the herd, most of
his colleagues will have made the same mistake.Following the last three big crashes on Wall Street, employment at
securities firms decreased by about 20 percent. That means there is an 80 percent chance the
trader keeps his job and comes out okay; the Lexus can wait until the next bull
market.

(4) The trader sells
but the market rises.This scenario,
however, is a disaster.Not only will
the trader have significantly underperformed his peers – he’ll have done so
after having stuck his neck out and screaming that they were fools.It is extremely likely that he will be
fired.And he will not be well-liked, so
his prospects for future employment will be dim.His career earnings potential will have been
dramatically reduced.The Signal and the
Noise, p. 354-355.

Silver makes the case that most traders will pick (3),
which, in economics, is why it takes a good long time to burst a bubble:“The
market can stay irrational longer than you can stay solvent.”(John Maynard Keynes, op. cit. p. 360)The trader picks (3) even though he or she
knows that what is happening is irrational, unsustainable, and ultimately,
unethical.

Now imagine you are a Christian mortgage broker, or a
Christian investment manager or adviser running some sort of trust fund, in the
run-up to the Great Recession of 2008.I’ve
met several, and it’s extraordinarily hard to not fall into (3), the safety of
the herd.(To their credit, the ones I
know did NOT do so.)

This basic human dynamic of communal cooperation, altruism, or selfishness has been explored and confirmed in both behavioral economics and social psychology. Here's the behavioral economics version:

Further research by Ernst Fehr and his colleagues has show that consistent with Andreoni's finding, a large proportion of people can be categorized as conditional cooperators, meaning that they are willing to cooperate if enough others do. (Richard Thaler, Misbehaving, 2015, p. 146).

Nobel Laureate Joseph Stiglitz summarizes the social psychology version of the same idea:

Recent advances in the study of social norms
show that many or even a majority of people will abstain from an individually
beneficial but socially harmful action if they perceive that most people do
too. But the converse is also true. This has an important consequence: desirable behavior can quickly degrade when
people are exposed to a sufficient number of transgressions.The Price of
Inequality, 2012, p. 123.

If in fact we are going to Babylon, as Mark Labberton, David
Kinnaman, and others firmly believe, then we face a safety of the herd problem
with eternal consequences.Describing
the original exile to Babylon (605BC) Michael Jossef writes:

What made [the Jewish exiles] ordeal all the more enticing
and seductive that they were not, strictly speaking, imprisoned or
enslaved.Rather, they were placed in
luxurious surroundings in Babylon.They
lived in the palace of King Nebuchadnezzar, and they were surrounded by
pleasures and enticements.Even though
they had been forced into exile under violent circumstances, they landed in the
lap of luxury.No doubt, these young men
felt a certain degree of curiosity and wonder in everything they saw – the
beautiful buildings and gardens of Babylon, the furnishings of gold, silver,
and fine imported fabrics.All the
luxuries of the ancient world were placed at their disposal.

So Daniel and his companions faced a dilemma, and it is much
like the dilemmas you and I face.We
live in a world that is hostile to our faith, our values, and our beliefs, yet
it also offers many materialistic enticements and sensuous delights.We are tempted to wonder, can such a world of
luxury and wealth be so bad?Can the
things of this world be so wrong if they feel so right? Daniel pp. 29-30

Many Bible scholars believe the sons and daughters of Judah’s
nobility did exactly that – they blended in, went along to get along, and had a
nice comfortable Babylonian life – eschewing their Jewish faith.I firmly believe that this choice -- personal
integrity vs the safety of the herd -- will be exactly the choice our young
people will face in the decades ahead.

Paul had very strong views about this:“Surely you remember, brothers and sisters,
our toil and hardship; we worked night and day in order not to be a burden to
anyone while we preached the gospel of God to you.” (1 Thessalonians 2:9).It was Paul’s teacher and mentor, Gamaliel,
who stood up to the herd and said of The Way:“[I]f it is from God, you will not be able to overthrow them.You may even find yourselves fighting against
God!” (Acts 5:39)

A profound question is how we prepare young people to have
personal integrity -- standing firm against the seeming safety of the
herd.Clearly they will have to diligently work hard, and be more capable than their peers (Daniel
6:3).They will need to be incredibly
well educated – Daniel, Paul, and Moses well educated of their time, and Esther
deserves honorable mention.I am
convinced they will need to be entrepreneurial, quite capable of tent-making,
to take a lesson from Paul (and Moses).They
will be tactful and diplomatic leaders (Daniel 2:14).They will need to be incredibly wise, far
more than adept information processors.They will need to be able to think “outside the box,” which starts by
being tuned in to the creator of the universe (Numbers 12:3). Self-control will
be crucial.

Probably Pharaoh’s and Nebuchadnezzar’s magicians did keep
their jobs – although arguing from Biblical silence is risky. Clearly the far
majority of the Pharisees fought against the Christian movement through AD
70.We do have one notable Biblical exception
where following the safety of the herd did NOT work out so well, and that would
be the conclusion of the story of Daniel in the Lion’s Den:

Then the king gave orders to arrest the men who had
maliciously accused Daniel.He had them
thrown into the lion’s den, along with their wives and children.The lions leaped on them and tore them apart
before they even hit the floor of the den.(Daniel 6:24)

“What the coming trade
war will do, however, is cause a lot of disruption. Today’s world economy is
built around “value chains” that spread across borders: your car or your
smartphone contain components manufactured in many countries, then assembled or
modified in many more. A trade war would force a drastic shortening of those
chains, and quite a few U.S. manufacturing operations would end up being big
losers, just as happened when global trade surged in the past.”

(An important
note: Krugman won his Nobel prize in
Economics for his work on world trade.)

“China’s emergence as
a great economic power has induced an epochal shift in patterns of world trade.
Simultaneously, it has challenged much of the received empirical wisdom about
how labor markets adjust to trade shocks. Alongside the heralded consumer
benefits of expanded trade are substantial adjustment costs and distributional
consequences. These impacts are most visible in the local labor markets in
which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is
remarkably slow, with wages and labor-force participation rates remaining
depressed and unemployment rates remaining elevated for at least a full decade
after the China trade shock commences. Exposed workers experience greater
job churning and reduced lifetime income. At the national level, employment has
fallen in U.S. industries more exposed to import competition, as expected, but
offsetting employment gains in other industries have yet to materialize.” (Italics added for emphasis.)

Worstall’s (and
Krugman’s) conclusion is that free trade is a good thing, but really that’s
beside my point.

If you are educating
young people, the crucial idea here is
that every time the political/economic winds shift, there will be employment
disruption. How do we prepare our kids
for this eventuality? The winners
will be those who can adapt quickly. And
the consequences of losing are likely to be much more difficult.

I can think of two occasions
where either the Democratic (1994) or Republican (2008) party were declared dead
on arrival, and I certainly don’t buy the idea that the Democratic party is
dead today. It seems
reasonable that the political winds will shift once again.

I distinctly remember
reading an article way back in 1992 to the effect that, economically, it really
did not matter who won that election: Either
President (George H.W.) Bush or President Clinton would be forced into similar economic
policies (e.g. smaller government/deficits, free trade) or the United States
would suffer significant punishment in the world markets.

With the Trump
administration, that is clearly no longer the case. Whether you agree or
disagree with these changes, clearly significant changes are coming
economically. And these will be disruptive, period.

Thus, the long-run
question for Christian education – Can we
train up children who can readily adapt and change when the political and
economic winds shift?

Already anticipating
this rapidly-changing economic world in the late 1990s, former Labor Secretary
Robert Reich proposed a three-part recipe for career success:

(1) Work full-time with an employer who will develop skills in you that
are readily transferable to other labor domains,

I actually followed
his advice, which is why, back in 2000, I was able to launch GraceWorks. And I continue to pursue (3) in my
not-so-spare time.

The point being, what Reich
suggests is a workable strategy, and it is hard.BUT ... entrepreneurship is actually declining with young people in the United States, according to an important just-released economic report by the Gallup organization.

What are we doing, as
Christian schools, to help our Jacks (and Jills) be nimble and quick in our
rapidly changing economic world? Because rest
assured, it is going to keep changing.

At a minimum, we have
to get our entrepreneurial parents and supporters in the classrooms. We must!

Monday, February 1, 2016

From a MUST READ book: Most Likely to Succeed, by Wagner and Dintersmith, 2015. If you really want to help kids, read this important book! More coming.

Incidentally, who knew more about calculus - the Prophet Daniel or Leonardo da Vinci?

Most likely, the surprising answer is the Prophet Daniel. Note this recent article in Science. For all his brilliance, Leonardo actually had a third-grade understanding of math, according to Peter Bernstein in Against the Gods: The Remarkable Story of Risk, 1998. Which makes all of Leonardo's accomplishments even more remarkable.

But also ... this understanding puts the Biblical book of Daniel in a slightly different light as well. The prophet that Jesus quoted the most was a thinker, a very logical person. Hmmmm ....

Sunday, January 31, 2016

The
northern Kingdom of Israel had been captured and exiled by the Assyrians
(capital: Nineveh) in 722BC (“the 10 lost tribes.”) The southern kingdom was saved for over a
hundred years by the repentance of good King Hezekiah (2 Kings 19).

Good
King Josiah, Hezekiah’s great grandson, comes to power in Judah in 641BC,
at the age of 8 years old. Jeremiah
starts prophesying in 626 BC, and around 622BC,
under Josiah, Judah has its greatest spiritual revival ever, once the Torah is
rediscovered in the temple.

After
several decades of not celebrating the Passover, King Josiah reinstates
Passover in epic proportions:

Then
Josiah provided 30,000 lambs and young goats for the people’s Passover
offerings, along with 3,000 cattle, all from the king’s own flocks and
herds. The king’s officials also made willing contributions to the
people, priests, and Levites. Hilkiah, Zechariah, and Jehiel, the
administrators of God’s Temple, gave the priests 2,600 lambs and young goats
and 300 cattle as Passover offerings. The Levite leaders—Conaniah and his
brothers Shemaiah and Nethanel, as well as Hashabiah, Jeiel, and Jozabad—gave
5,000 lambs and young goats and 500 cattle to the Levites for their Passover
offerings …. The entire ceremony for the LORD’s Passover was completed that
day. All the burnt offerings were sacrificed on the altar of the LORD, as King
Josiah had commanded. All the Israelites present in Jerusalem celebrated
Passover and the Festival of Unleavened Bread for seven days (Chronicles 35:7-17)

Daniel
was born, in Jerusalem, into wealth and nobility, shortly
after this Passover. He was born in the greatest spiritual revival ever seen in
Judah. He had a great childhood education – and great spiritual formation. He was
at the heart of revival – at Ground Zero, in Jerusalem. Undoubtedly as a child he saw King
Josiah, Jeremiah, and the prophet Zephaniah first hand. Probably his family dined with all of
them. What is notable about these prophets is their significant world concern.[1] Daniel’s childhood was filled with stories
and prophecies speaking of various world powers and rulers. The prophet Habakkuk arrived later in the
scene, around 612BC.

Probably
the penultimate event of Daniel’s childhood was the fall of Nineveh in 612BC. Assyria had been one of Judah’s greatest
enemies for over a century. In today’s
terms, Daniel was in his later elementary years, perhaps in our “5th
grade,” when he sees the results of nation-wide repentance and revival: –
good triumphing over evil – all prophesied in advanced by prophets that he
personally had heard.

It
would not be much of a stretch to say, in today’s terms, that Daniel had a thoroughly
spiritual / religious (Christian) upbringing in his elementary years. But somewhere in late middle or high school,
the bottom fell out.

After
failing to follow the advice of Jeremiah, King Josiah is killed by the
Egyptians in 605BC.
Daniel is now 11-15 years old.
The two kings who follow are both evil. Jeremiah is abused by the false prophets, and
weeps tears without end. Habakkuk and Zephaniah implore a nation to repentance,
all to no avail.

Under
evil kings once more, Israel returns to the idolatry, carousing, and occultist
behaviors that sunk Israel a hundred years earlier. Daniel observes all of this firsthand. He’s at the heart of it, in Jerusalem, watching
his beloved nation come to ruin.

Four
years after Josiah died, Nebuchadnezzar and his armies come, attack Jerusalem,
and win.[2] Note how Isaiah prophetically described those
days:

The Lord,
the Lord Almighty,
called you on that day
to weep and to wail,
to tear out your hair and put on sackcloth.
But see, there is joy and revelry,
slaughtering of cattle and killing of sheep,
eating of meat and drinking of wine!
“Let us eat and drink,” you say,
“for tomorrow we die!”[3]

From
the heights of faithfulness to God in 612BC Judah sinks to the very depths just seven years later. Jerusalem itself falls. Daniel is careful to
mention – twice – that sacred objects from the temple were taken into the
temple of the false gods of Babylon. This apparently was devastating to godly
Daniel.

Daniel
has several months to ponder it all, traveling to Babylon over 500 miles
away. Soon he learns of Jeremiah’s
prophesy that there will be no return from his exile for 70 long years.

Take a moment to imagine the emotions
of that – walk 500 miles in young Daniel’s moccasins.

The Hebrew
word often translated “eunuch” is unclear[4],
but there is a good chance Daniel was castrated. The Babylonian name he was given meant “Lady
protect the King.[5]” His first challenge was to study, for three
long years, the occultist practices of the Chaldeans – the very same practices
that he watched, firsthand, ruin Judah:

“The
Hebrew youths were trained in the wisdom of Babylon. This involved being acquainted with
polytheistic writings and occult practices, astrology, divination, and magic –
knowledge forbidden in Israel. It was
spiritual patbag, [sic] the
educational equivalent to Nebuchadnezzar’s rich food. The youths became experts in the occult,
learned in the lore of Babylon. Their
education was intended to alienate them from their Israelite culture.”[6]

Of top
of that, Daniel’s next challenge was to abstain from food offered to idols – at
the peril of his life. Through all of
it, serving under a heathen egomaniac[7]and
at least two other ethically-challenged tyrant kings, Daniel stayed steady and
true to his faith.

How did he do it?

Daniel
was flesh and blood like all of us. Studying his childhood and teenage years, it
is more understandable why he would not give up his faith in Yahweh. We should use the lessons of his childhood and
teenage years to raise-up kids
for an uncertain future.

Daniel
observed and experienced the death, destruction and lies of the ungodly first hand. He didn’t
read about it in a book. It was no
intellectual exercise to him. It was
life and death – perhaps even the life of his parents. For Daniel, it was as real as it gets.

As we
think about how we train kids in secondary education, a few years away from the "real" world, what we are talking
about here is much, much, more than apologetics. Our kids need to experience God, and to
understand, at a gut, visceral, emotional level - the
real consequences of evil.

That process can begin with a book or a video, but
ultimately it ends with a person – a teacher, a mentor, or an inspirational speaker.

CRITICALLY, we need to have our
high school kids study and learn at a heart level what happens when godless
people with money and power really mess things up – when individual lives,
families, peoples, companies, and entire nations come to ruin without a belief
in God. We need to do this high school,
with a Christian worldview critique, as did Jeremiah, Zephaniah, and Habakkuk
in Daniels’ time. We need to make it as real
as we possibly can.

A very
practical application of all of this is how to deal with Pastors and other
idealistic Christians who believe that the best thing they can do for their
high school kids is to put them in public high schools, to “experience the
world.”

Sure,
we can let our kids experience their peers being stupid – drinking,
smoking, carousing, etc. But to really
mess things up takes power and money.And that’s what Daniel observed first hand– people with power and money ruining an entire nation.

It
wasn’t Daniel’s peers who were the problem:,it was the people in charge.

I’m
amazed at all the people connections flowing around Christian schools. We can
find articulate Christians who experienced godless people really messing things
up. They can share their experiences
with our students in class or in assemblies.

Recent
history provides all kinds of opportunities to accomplish what I’m describing,
with living Christians who experienced, firsthand, the consequences of evil.

(1)
POWs from Vietnam are still available, and many of these are Christians.

(2)
Iceland is about 4% evangelical Christian, Greece, less than 1%. Michael Lewis, the author of Moneyball,
describes how Iceland got into national debt several hundred times their gross
domestic product in his funny book, Boomerang. If I could wave a magic wand, this book
would be read and discussed (with supplemental information) by every Christian
high schooler in the country. Inside
Job is a nice documentary on this, but there are many. We can study the economics of it, and then
talk about the real impact of evil at the highest levels of government and
business. (Perhaps we can even encourage
a few Christians to consider economics as a career).)

(3)
Albania is in ruins after decades of being an atheistic country. Our Christian high schoolers need to study
why. There are over 100,000 Albanians in
the United States, concentrated in our largest cities. (Japan is another possibility.)

(4)
Made right here in the good old USA, Enron’s collapse cost shareholders $94
billion. Jeffrey Skilling’s views of
evolution were applied to staffing decisions;,
the consequence was that
every year, 10% of every department (“the weaklings”) had to be laid off -mandatory. Hence, the corporate culture of Enron became one
where dissent was not tolerated. (Read:
The Smartest Guys in the Room)There are many former Enron employees and
stockholders around the country who could speak to our students.

(5) The
Hindu system of India
has systematically abused lower classes for three millennia, to this very
day. Our high schoolers should know why,
and see what a difference Christianity has made in Northeast India. Missionaries and immigrants alike could speak
to our students about the horrors of the caste system.

(6) We can find many Christians who converted later in life, and carry with them heart-ache and pain of their pre-Christian legacy. I was surprised to learn that a key secretary
to a major mega church pastor in Colorado Springs had been married four times –
three times as an unbeliever. Some of
these will talk to our students. Former
drug addicts and alcoholics, now Christian, can speak to our kids. Ditto ex-felons.[8]

(7)
There are Romanians in the US who experienced firsthand the evils of Nicolae
Ceausescu. Any totalitarian country will
have Christian immigrants who would be available to speak to your students.

(8) I
have run into many people in my travels who participated in one way or another
with the mortgage bubble. One
conversation I vividly remember was a woman who told me that her husband did
NOT go to jail, although many of his colleagues and competitors did. There are many Christians who can talk to our
students about the abject greed in the run-up to the 2008 crisis.

These
are just ideas to stimulate your own creativity.

As I think this through, it seems more impactful for real Christian people to talk to our students about
their experiences when ungodly people have power and money, and lead
corporations, peoples, countries, marriages, and their own lives to ruin.
That’s what it was like for Daniel. Of course the character lessons must begin in primary and continue in the secondary, along with college prep academics.

We can
talk about sexually transmitted diseases in the abstract, but over 30 years ago
I knew a Christian man with late stage, incurable syphilis. My somewhat incoherent conversations with him
made an indelible impression on me. We
can talk about communism in the abstract, or we can have Chinese Christians
talk to our kids about real persecution for their Christian faith.

Daniel
stayed faithful in the worse imaginable circumstances. We hope the same for our
students. If we were to follow Daniel’s
example, the safety gloves need to come off in high school. Through our watchful Christian tutelage, our
kids need to see, first hand, how people who have power, people who have money,
people who can write and speak or think, can really, really mess things up –
nations, companies, peoples, families, and their own lives.

I know
people who can share like this are available, because I meet them all the time.
They need to speak to our students from the heart. Homeschoolers can always watch a video, but we have enough students in a Christian school to bring in
LIVE speakers – frequently.

And we
must – a lot - becausemeaningful, important activities like this –
which are hard to do for public / charter / home school – becomes a key
differentiating factor … a
key factor for parents to choose our school over the competition. Of course, all of it can complement your
students’ academic studies. And these
activities profoundly prepare your students for the uncertain future they face.

We
need to think like that
– who do we know from India? Who lost
their life savings to Enron? Who
recently lived in Iceland, Greece or Albania? What about missionaries? Who was
involved in the banking / mortgages and saw firsthand the greed and
devastation? Do we know someone in the entertainment
industry? Who around here has served
hard time? Who knows a Christian unwed
mother who is struggling to finish college?
Our students need to hear from them, first hand. If these speakers engender righteous anger -
or tears are shed - so much the better.

Keep in mind, by doing this, now pastor has a compelling reason to
keep the kids in our high school, and not go public with his kids. We are accomplishing his or her objective in
a much more sincere and effective way.

The
temptation here will be to bring in the YouTube videos, DVDs and books. There is a place for this. BUT ….
Homeschoolers can do that, too. Pastors
can do that with his public-schooled
child at home. Charters can bring in a
sanitized version.

Importantly,
multi-media won’t have the same emotional impact on our kids as live flesh and
blood. Our students need to hear first
hand from broken, forgiven, restored people - sharing from the heart. As
real as we can make it.(c) 2016 Dan Krause, GraceWorks Ministries, All Rights Reserved

[1] Which we need to
develop in our children, but that idea seemed out of the scope of this message.

Friday, January 15, 2016

Having reviewed still one more home grown survey, I would like to state, for the record, the problems I have with home grown surveys. Undoubtedly you will conclude that I am biased, since GraceWorks has its own proprietary survey product.

Struggling right now through another rather difficult custom survey project, there are times when I wish homegrown surveys would in fact do the job - it's frankly a lot of work!

In priority order, here are my concerns:

(1) Is it a good score? Without comparison data you tell me. (e.g. Please rate the overall customer service you and your family receive from ______________: Excellent 46.60%, Very Good - 32.04% Good - 14.56%, Needs Improvement - 6.80%. Help me understand, please: Is that good or bad?)

(2) How much do parents care about this item? In other words, even if its effectiveness is not stellar, does it matter? This is almost a tie with (1) in concern. For example, for a Christian school, is "Teachers exhibit care and concern for students" more important than "Use of technology in Instruction?" Answer: The former is more important, BY FAR. (How do I know? Asked over 35,000 parents ... )

(3) If a program element is done poorly or well, to what degree does it impact overall satisfaction? The assumption of our survey is that Christian schools have limited time and money, and therefore we need to pick out the program elements to improve that REALLY MATTER. That's quite different than program elements that happen to strike my fancy ...

(4) Scale problems. There is a whole book, (The Ultimate Question, 2nd edition) - not to mention numerous websites - on the correct scale to ask the willingness to refer question: On a scale of 0 to 10, with 10 being high, how likely is it that you will refer our _______ to a friend or colleague? This is not a copyrighted question. How to score the question can easily be found as well. Don't ask it Yes / No, Don't ask it in 4 or 5 point scales. On five point scales, there are OCD / Perfectionists types who will never, ever give you a 5. No matter how much you deserve it! And 4 misses the cut on the top category of willingness to refer.

It took Fred Reichheld 45 years to figure this all out - why mess with a good thing?

(5) Testing multiple aspects in one question. In general, if your question or answer has an "etc." this is NOT GOOD. Consider this question: "Has your student ever been a victim of bullying, teasing, harassment, etc. while attending ________." Can anyone answer "No" to that question without lying? And do we think for a minute these are all equivalent?

(6) No cross-tabbing. It's not just how many people answered a question a given way, but how does answering the question that way correlate with other important things, like overall willingness to refer?

Let's say that 50% of respondents check the box that says that coming up with the cost of tuition is a large sacrifice for them. Is that good or bad? Now consider if you knew that those 50% also were moderately MORE SATISFIED with the school than anyone else, and the difference was statistically significant ... How might that change your view of people sacrificing to pay your tuition?

(BTW ... that is the typical result when we ask the question.)

(7) Opportunities lost ... to recruit volunteers, ask for leads, keep tabs on your alum. Of course, this requires you to vary questions asked based on the answers to other questions. Can be done, for sure, but difficult and painstaking for people who don't do it all the time. (It's painstaking for people like me who DO do it all the time.)

OK ... I feel better now. Back to another painstaking custom survey setup.

Myth #1: Christian school parents are extremely
sensitive to even the slightest changes in tuition pricing.

Reality #1: Christian school parents are first and
foremost concerned about QUALITY. They
are shopping VALUE. It’s all a lot of
money – not to mention time, hassle, transportation, etc.

Solution #1:
Any “cutting expense” solution to balancing the budget risks losing the
core strength and main attraction of a Christian school, which is
providing a HIGH QUALITY EDUCATION. Focus
on revenue solutions instead. That
is our focus at GraceWorks, starting with real help in marketing and fund
development.

Solution #1a: For many schools, significant increases
in tuition or significant decreases in automatic discounts ARE POSSIBLE with limited
consequences. However, to really know if this is true for your school, you need to
take GraceWorks’ Parent Satisfaction and Referral Survey.

Why? As a completely normed device, comparing
your results to 579 schools other Christian Schools, we know, we know, WE KNOW if your parents are truly satisfied or not. And that makes ALL the difference as to
whether you can do something dramatic in raising prices.

In addition, the PSRS tells you satisfaction by income
level of your parents. In question
would be families who formerly “got by” with all your automatic discounts, but
now must apply for financial aid. (This
would be the $50,000 to $74,999 level, and depending on the number of children,
perhaps even $75,000 to $99,999.) Our data is normed at the subgroup level, so
we can tell you the relative satisfaction
at each income level.

With a “home-grown”
survey, you are never really sure whether your scores are good scores or not,
especially when the average Christian school is so highly satisfying. For
Christian schools that are not so satisfying, raising tuition is a VERY risky
proposition.

Note: Both “Should you?” and “How do you go about it?” are
in question here. It is only because of
the survey results of some 88,000 respondents that GraceWorks can speak with authority
about how unnecessary many Christian School’s financial problems really
are – ditto many school closures. (The “How to” part is explained in detail in
our Revenue Revolution Bootcamp, session #5.)

Solution #1b:
In general, it is a BAD idea to
present tuition increases as a percent.
Just state the lump sum. There
are many schools that are horribly
under-priced, and need tuition increases of the order of 50-100%. (E.g. member rates at some denominational schools.)

Don’t present it the percentage way – simply state
the amount of the increase in dollar terms – best is extra dollars per
month.

Myth #2: The world has changed so much that K-12 Christian
schools can’t survive.

Reality #2: The
problem is Christian Schools’ old wineskins, which are simply not working in
today’s new world. To be blunt: Old wineskin schools will NOT survive in
today’s changed world.

This is particularly true in Christian school finance, where
emotions, collective “common sense,” and “hardening of the categories” keep in
place a totally counter-productive organizational culture. To paraphrase Mark Twain, “What we know that ain’t so” is the real
problem.

By the numbers Christian schools are among the most
satisfying “businesses” in the world, using international metrics. More satisfying than Disney and John Deere, on
average. Many are more satisfying than
Amazon or even Harley Davidson. Our parents will sacrifice to put their
kids in our schools – if we maintain quality.

However, a significant problem is that the next generational cohort of parents, Milliennials, have lower income and wealth than any of the
last three. In addition, household income
is highly variable, both nationally and individually. Overall, the middle class is declining. Many immigrants, now in many parts of the country, will also be motivated to have their children in a Christian school. Many of
these will likely need help to attend our schools.

Solution #2a:
Ultimately one-size, low-cost leader pricing will not “fit all.” Because of the nature of our changing job
market, and variable incomes, some parents, some years, will be able to
contribute to financial aid fundraising.
In other years, these same parents may need financial aid for their
child to remain at the school.

To survive, Christian schools will need to move to a higher
tuition, and often, a much higher financial aid model. At a minimum, we need a full-cost model, but in reality
Christian schools should be value-priced,
which - recognizing past generosities that add value today – will actually be
higher than the current cash cost to educate a child. (And yes, the
amount we should be paying our teachers needs to be part of the equation
here.)

Solution #2b:
This financial aid program will, of necessity, be highly
sophisticated. An objective, third party
such as FACTs or FAST should assess financial need. To avoid abuses, and to engage the truly
needy to apply rather than walk away, a Biblical integration of social norms
theory in behavioral economics is needed.
(See session #3 of our Revenue Revolution Bootcamp.)

Solution #2c:
Behavioral economics has also taught us that price influences demand in
often unexpected ways, particularly in big ticket purchases. Many schools have noticed that demand seemed
to go up with significantly increased tuition (e.g. The Rock, Gainesville, FL,
East Linn Christian, WA). Through a
series of carefully controlled experiments, a giant in the field of behavioral
economics, Dr. Daniel Ariely, has determined that:

Traditional economics assumes that prices of products in the
market are determined by a balance between [supply] and [demand] … The price at
which these forces meet determines the price in the marketplace … as our
experiments demonstrate, what consumers are willing to pay can easily be
manipulated, and this means that consumers don’t in fact have a good handle on
their preferences and the prices they are willing to pay for different goods
and experiences (Ariely, Predictably Irrational, p. 47-48)

Solution #2d:
Ultimately, for Christian schools to survive, we will be filling up our
classrooms through a mix of full and partially-paying students. With more students, our cash cost to educate
a child will decline, while at the same time, total revenues will increase, as
seats formerly empty now have partially paying students. (With the exception of staff, we recommend
that most everyone else pays at least 50% of tuition, regardless of the result
of the needs assessment.)

Solution #2e:
Ultimately both church support and fund development efforts will need to
move to an inspirational basis – and “filling the gap” is NOT that. “Your gift(s) help children be here, who
otherwise wouldn’t” is a powerful case for support when coupled with the
very real benefits of Christian schools (higher college graduation, character,
staying in church, etc.) Note that only when tuition is raised can
church support of budget gaps be redesignated to needs based financial aid. There is no way to do it otherwise.
Needs based financial aid for worthy students is a cause concept that will be
more supportable to younger church-going givers.

Myth #3: All
we need is more students, and we will be fine.

Reality #3:
For some schools, this is true.
For these schools, a practical problem is – where would a significant
influx of new students GO – into what
grades? Or more realistically, based
on our typical entry points, in what
grades would we expect to pick up a much larger than usual group of new
students?

The problem is, it is often difficult to fill a gap in
students at certain grade levels, such as 2nd or 3rd or 4th
or 11th grades. Even with
very aggressive promotion, we don’t get students “in just the right
places.” Thus, enrolling a large number
of new students typically means we have to add a teacher / aide or two at our
usual entry points (e.g. PK, K, 6th, 9th), which then negates
our cash flow gains from the new students’ tuition.

The lower the NET tuition – full tuition minus average
discounts and average financial aid – the less likely it is that you will be
able to “market your way out” of a deficit financial situation. You have to add staff all too soon.

Solution #3a:
You have to know your numbers.
GraceWorks’ marketing coaching clients use an elaborate, multi-tabbed
spreadsheet which shows you the results of hypotheticals in real time. This is
both in terms of the overall budget, and per student costs and revenues.

In many cases the only way out will be to reduce discounts and/or raise
tuition. A starting place for the
change process is a leadership discussion on this question: On what
grounds do we say that certain people will pay less than the cost to educate a
child?

Myth #4: All
financial aid needs to be FUNDED.

Reality #4: This idea ignores the positive financial
impact of families who are paying 50% or more of their child’s tuition, even if
the other half is not funded. Typically
this myth results in too little financial aid being given away, resulting in
prospective families not enrolling, or current families not re-enrolling. This results in empty seats and lost tuition
payments. In the case of current
families who exit, often this leaves you with gaps in the hardest grades to
fill.(And never mind why we didn’t have to fund automatic discounts all
these many years ….)

Solution #4a:
Do everything possible to raise dollars for financial aid, a year in
advance if possible. (It’s a great case for support, as mentioned above.) But do NOT limit yourself to awarding just
the amount of financial aid you raised.
Instead, the amount of financial aid awarded would be based on the
individual family need – where you are giving JUST ENOUGH for that family to
say “Yes.” In addition, use the “as you
go” week-by-week assessment in #5 below to make sure that for the school as a
whole, you are NOT giving away too much financial aid to make your budget.

Solution #4b:
To assess the overall effectiveness of your financial aid program,
change your metrics to:
(1) Do we have more or
less net tuition revenue compared to last year?
(2) Do we have more students
than last year?

For our marketing coaching clients, we have developed very
sophisticated methodology to determine if too much financial aid is being given
away – both to individuals or for the schools as a whole.

Myth #5: If we
don’t fund financial aid, there is no way to know if we will make our budget at
the start of the school year.

Reality #5: By
converting your budget need into the number of “Full Pay Equivalents” you need,
you can assess, week by week, where you are both in achieving the number of
FPE’s you ultimately need, and you can thereby control the percentage of
financial aid (relative to the budget) being given away.

To be clear, no Christian school could survive if every
student was paying 50% of tuition. There
are times when you may need to say “No” to a family who can pay the 50% if accepting that child will preclude a full paying family.

Solution #5a:
Use the week by week FPE & ANT(s) analysis tool we have developed
for our Marketing Coaching clients. We
recommend that an FPE is the actual cost to educate a child, regardless of your
actual tuition.

Tuesday, January 12, 2016

Help me out with quick pop quiz. What percent of word of mouth do you think happens online? In other words, what percent of chatter happens over social media, blogs, e-mail, and chat rooms?

If you're like most people you probably guessed something around 50 or 60 percent. Some people guess upward of 70 percent, and some guess much lower, but after having asked this question of hundreds of students and executive, I find that the average is about 50 percent.

And that number makes sense. After all, social media have certainly exploded of late.

Millions of people use these sites every day, and billions of pieces of content get shared every month. These technologies have made it faster and easier to share things quickly with a broad group of people.

But 50 percent is wrong.

Not even close.

The actual number is 7 percent. Not 47 percent, not 27 percent, but 7 percent. Research by the Keller Fay Group finds that only 7 percent of word of mouth happens online.

Most people are extremely surprised when they hear that number. "But that's way too low," they protest. "People spend a huge amount of time online!" And that's true.

People do spend a good bit of time online. Close to two hours a day by some estimates. But we forget that people also spend a lot of time offline. Most than eight times as much, in fact. And that creates a lot more time for offline conversations.

We also tend to overestimate online word of mouth because it's easier to see .... But we don't think as much about all the office conversations we had over the same time period because we can't easily see them.

Jonah Berger is the James G. Campbell Assistant Professor of Marketing at the Wharton School at the University of Pennsylvania. He has published dozes of articles in top-tier academic journals, and popular accounts of his work have appeared in places like The New York Times, The Wall Street Journal, The Washington Post, Science, Harvard Business Review, Wired, Businessweek, and Fast Company. His research has also been featured in the New York Times Magazine's annual "Year in Ideas" issue.

A consistent finding in our Parent Satisfaction and Referral Surveys is the relative unimportance of standardized test score results. A recent New York Times article noted the case of South Carolina, where all 11th graders are required to take the ACT:

The first results, from the ACT college admissions tests, showed that only about a quarter of students statewide were ready for either college-level math or reading. Just 6 percent of black students and 15 percent of Hispanic students scored ready for college in math, with only slightly higher rates for reading. In one poor rural district where most of the students are African-American, graduation rates have risen to more than 85 percent, yet not one student scored high enough on the ACT to be deemed ready for college in reading or math

Parents totally understand the need for college, and we need to make the case for the fact that standardized tests do measure college-readiness, academically-speaking. We need to say it, write it, and then - repeat the process.

What's not in question is that our Christian schools do great on standardized tests. What is in question is whether parents will care.

In the same study, below - "Stubbed Toe Effect" - being close to the headquarters of the denomination didn't help. For 10 of the 13 elementary schools we surveyed, "Financial stability of the School" was in the top three problematically (N = 1197).

Some people I know might in fact say that being close to HQ is actually a problem - hardening of the categories.